Does knowledge of digital technology affect corporate innovation? Evidence from CEOs with digital technology backgrounds in China

ABSTRACTGlobal economies are increasingly focusing on digital technology to break through the conventional innovation development pattern. This study examines the degree to which CEOs with digital technology backgrounds affect corporate innovation. In a broader sense, it investigates the significance of digital technology in the innovation transformation of global economies. We find that CEOs with digital technology backgrounds significantly enhance corporate innovation performance. Mechanistic tests indicate that CEOs with digital technology backgrounds promote corporate innovation performance through a stronger willingness for digital transformation, higher level of internal control management and focus on fostering a stronger culture of collaboration compared to CEOs without digital technology backgrounds. Additionally, CEOs with digital technology backgrounds are better at promoting corporate innovation within state-owned enterprises and enterprises that do not receive industrial policy support. Further analysis suggests that CEOs have a greater impact on corporate innovation when the macroeconomic environment is compatible with their personal traits. Therefore, for companies competing in the field of digital technology, talent construction is vital to gaining a competitive advantage.KEYWORDS: Digital technologyCEOcorporate innovationdigital technology backgroundsJEL CLASSIFICATION: G30J24L10M12O32 Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 The US government's 2018 National Strategy Report on Machine Intelligence in the United States; the UK government's 2018 Industrial Strategy: Actions in the Field of Artificial Intelligence; the Japanese government's 2019 Implementation of the Comprehensive Innovation Strategy and the Chinese Government's 2021 proposed Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China emphasize the need to cultivate, attract and retain digital technology talent.2 The first two revolutions are acknowledged to be the steam engine and the electrification eras.3 For example, Linux is an open source operating system developed by thousands of independent programmers working together over the Internet. In addition, in 2006, the Time magazine awarded its Person of the Year to all Internet users, mainly because many people on the Internet help each other for free, not only changing the world but also the way the world can be changed.4 To make the one-time coefficient (CEODT) in Model 10 comparable with the coefficient of the benchmark regression, this study decentralizes the continuous moderating variable within the group.